Lead Generation: A Strategic Guide for Marketing Executives
Dec 3, 2021|Read time: 12 min.
- Lead generation in marketing is the process of capturing contact information of potential customers who are interested in your products and services.
- Lead generation enables you to build a targeted audience of potential customers, develop relationships with that audience, and eventually convert them into paying customers.
- Inbound lead generation attracts prospects by offering something valuable. Outbound lead generation involves direct outreach to potential leads.
Lead generation is critical to business success. Without it, you can’t grow your sales pipeline or acquire new customers.
To consistently generate quality leads, you need a well-defined strategy that draws from multiple tactics. Without the right process, there’s a good chance you’ll waste time and money in digital marketing campaigns that produce mediocre results.
In this guide, I’ll clarify exactly what lead generation is and why it matters. I’ll also reveal some of the most effective strategies to fill your sales pipeline with quality leads.
What is a lead
A lead is a segment of your target audience that has shown interest in your product or service. There are many different lead stages and status to indicate where a prospect is in the sales funnel. I’ll cover those later in this article.
What is lead generation?
In marketing, lead generation is the process of capturing contact information of potential customers who are interested in your products and services.
Lead gen is different from demand generation. The main goal of demand gen is to amplify brand awareness and intensify interest until a potential customer is ready to engage with your company and become a lead.
New technology, shifting consumer preferences, changes in the economic landscape, and many other factors force marketers to regularly seek new and innovative ways of generating leads.
Too many marketing executives over simplify lead generation as a way to get a prospect into the sales funnel. But, there’s quite a bit more involved. Leads must be qualified and then nurtured to the point where they convert to a paying customer.
Depending on the product or service you sell, this can be a lengthy, complex process involving multiple touchpoints and numerous members of your sales team.
Why is lead generation important?
Even if you have an incredibly high retention rate and customer lifetime value (CLV), customers will eventually churn out for one reason or another.
An effective sales lead generation process helps you replace lost revenue by reaching prospects within your targeted audience. It also helps you nurture relationships with that audience and convert some of them into customers.
Digital technology has compressed the scale of globe and expanded consumer choice.
They can choose from multiple brands, buy in-person or online, and compare products to find the best one for their needs. With so much information available, you need a creative, effective lead gen strategy to get in front of potential customers at the right moment.
How lead generation works
There are two different types of lead generation: inbound and outbound.
Inbound lead generation attracts prospects by providing them with valuable content that solves their pain points.
If done effectively, a few of your prospects will give you their contact information in exchange for something extra. This can be blog posts, white papers, ebooks, case studies, etc
For example, you might add functionality for pop-up forms to your website that promotes a relevant case study. Once you have their contact information, you can further nurture the lead.
Outbound lead generation efforts, on the other hand, target leads that match the brand’s ideal customer profile (ICP) through outreach. The most common tactics include email, phone, direct mail, social media, or any other number of ways.
Both methods can be effective depending on your industry, product, or target audience.
What makes B2B lead generation different?
There are a few unique factors that B2B marketers should take into consideration.
Firstly, the sales cycle for B2B lead generation is longer than B2C. The number of stakeholders involved and the dollar amounts at stake result in a much more complex sales process. These processes can include multiple approvals, meetings, discussions, and more.
To ensure everything continues to progress smoothly, strong, high-touch nurturing is often beneficial. This might include email marketing, product demos, personalized webinars, and even on-site visits. All of these can help you to further understand the best way to help a potential customer.
Secondly, lead generation for B2B companies usually requires a more rigorous lead qualification process than B2C. This is due to the amount of time the sales and marketing team must spend nurturing leads before they will convert to customers. Nobody wants to waste time talking to unqualified leads.
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Lead generation stages
Not all leads are equally valuable, so it’s important to categorize them based on their quality and level of expressed interest. Each lead stage coincides with a portion of the buyer journey, and knowing what stage a lead is in allows you to engage with them in the most effective way.
Marketing qualified leads (MQL)
A marketing qualified lead (MQL) is someone who has expressed interest your marketing efforts but isn’t ready to speak to your sales team yet. For example, an individual might click a call to action (CTA) in a social media post to get a free downloadable ebook. The ad takes them to a landing page where they can get the download if they provide their email address.
Downloading the lead magnet suggests that the prospect is in the awareness stage and has an interest in solving a particular problem or achieving a goal.
But, before you send them to a salesperson, you need to qualify them more thoroughly.
Sales qualified leads (SQL)
A sales qualified lead (SQL) is a prospect who has clearly expressed interest in buying your product or service. At this stage, the prospect is able to make an educated decision about whether your solution will help them achieve their goals.
They’ve engaged with your marketing efforts to the point where you believe they want to purchase from you. At this point, you should introduce them to a sales representative who can answer their questions and guide them to the final purchase.
There are many reasons you might classify a lead as unqualified.
Maybe they don’t have the necessary budget, it’s not a priority yet, or they need features that you don’t offer. Or, maybe they’re part of a demographic or industry that you try to avoid.
Whatever the case, you don’t want your sales reps wasting their time on these leads.
Sales recycled lead (SRL)
A sales recycled lead (SRL) is a contact that the sales team sends back to marketing because they weren’t ready to buy yet. Marketing can then re-engage with the lead so that it doesn’t grow cold and will buy from you when they finally are ready.
Not all leads will convert to customers the first time around the sales cycle, even if they’re highly qualified. Any number of issues can cause a lead to hit the pause button. So it’s important to retarget them through email, ads, or behavioral marketing tactics.
Common lead generation status
Lead status is a classification system sales teams use to categorize leads. This helps organize prospects and identify next steps to keep the relationship moving forward. Marketers often use lead status within CRMs like HubSpot or Marketo to trigger automations and workflows. One example might be a follow up template to a specific email list.
Here are some common lead statuses.
A suspect is a lead that might be a good fit for your company, but you need additional information to qualify them. They are leads that need more investigation before moving them to the next stage in the buyer’s journey.
For example, someone requests information about your product or service. However, you don’t know the person’s role in the company, their decision making ability, or what they want to accomplish.
Unlike a suspect, a prospect has demonstrated interest in your company and/or product and has given you enough information to know the best way to engage with them. They have demonstrated buying intent in some way and now you need to nurture them.
For example, you might determine that a prospect isn’t the primary decision maker but is doing research on their behalf. Armed with this data, you can guide them to the next step in the buyer journey.
A contact is a prospect that has demonstrated sufficient interest and buying intent to merit more serious engagement from your sales team. They understand your product or service, can articulate their needs, and are ready to discuss the sale. They might not be quite ready to buy yet, but their behavior indicates that they’re moving in that direction.
This status refers to leads that are in progress in some way. At this stage, the sales team is still gathering information and communicating with the lead. Each CRM treats this lead status differently, so you may or may not use it depending upon your software.
An “opportunity created” is when a prospect presents you with an actual sales opportunity. This may take the form of an RFP or a direct proposal or a partnership through a group purchasing organization (GPO). An opportunity is active from the time that the prospective customer invites you to submit a proposal to the time of their final decision.
The opportunity lost status (or closed lost) refers to an open a sales opportunity that ends for some reason. You may want to revisit the prospect in the future, but for the time being there’s no opportunity for a near-term sale.
Use the nurturing status for a potential customer that has shown interest, but isn’t ready to purchase yet. You may need to establish trust and credibility, and show the prospect that you can solve their problem.
The primary goal of nurturing is to move leads further down the sales funnel. Content marketing, where you consistently provide valuable content to prospects, is an effective way to nurture leads.
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Lead generation scoring methods
To ensure that they only focus on leads that have the potential for conversion, marketers use a variety of lead scoring methods. This can help them identify the most qualified leads.
The first step in scoring leads is determining which variables correlate with high quality leads. These variables can include specific actions, information the lead has provided, or any other important data points. Every variable is given a value and the most important ones will receive the highest scores.
For example, you may determine that website visitors who discover your website through organic search are more likely to convert than those who find it via paid PPC ads. In that case, organic search as the discovery method would receive a higher score than paid. You might also assign scores based on things like job title, company size, geographic location, etc.
The lead score is the sum of all the individual variable scores. You may need to modify and adapt your scoring process over time. As you monitor the different factors that assist in getting lead conversions, you may find ways to improve the scoring of leads.
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Top lead generation strategies
Inbound lead generation
Inbound marketing means all the strategies, tactics, and tools used to generate inbound leads. What makes inbound marketing so effective is that once you create inbound systems and workflows, leads will start coming in automatically.
You don’t need to spend countless hours hunting them down. You still have to be involved, but you can focus more time and energy on engaging with prospects and refining your lead generation system.
Let’s look at some of the most common inbound marketing strategies and tactics.
Search Engine Optimization (SEO)
SEO increases organic search traffic in Google which grows brand awareness, drives qualified website traffic, and protects brand reputation. In other words, it’s a great way to generate leads for your business.
A well-defined SEO strategy ensures the right people visit your website and leads prospects through the conversion funnel.
Content marketing goes hand-in-hand with SEO. Once you’ve created outstanding content, you want to distribute it as widely as possible. Using social media, email, paid advertising, influencer marketing, and other strategies, you thoroughly promote your content for maximum exposure.
According to Demand Metric, content marketing generates 3x as many leads as outbound marketing at 67% less in costs.
Social Media Marketing
Connect with prospects where they’re already spending time on social networks. Social media is unique in enabling you to engage directly with your audience members. Understanding if your potential customers are on LinkedIn, Facebook, Twitter, or even TikTok is important for inbound social media marketing. This also helps you build brand visibility and generate leads.
Paid ads, such as those on social media or search engines, allow you to target very specific audiences who match your ideal customer profile. Sending those audiences to landing pages with lead capture forms can offer the opportunity to nurture the relationship.
Outbound lead generation
Outbound sales prospecting takes the opposite approach than inbound. Rather than attracting prospects, you’re reaching out to them with the goal of convincing them to take action. Outbound marketing is effective because it allows you to target the people or companies that you want to have as customers.
For example, with Account Based Marketing (ABM), sought-after accounts are targeted with highly personalized lead generation campaigns. Though this strategic outreach approach is labor intensive, it allows you to build a customer base that includes your ideal customers.
Below are the most common tactics used with outbound marketing.
Though it may not have the highest conversion rate, cold calling can still be an effective lead generation tool. It can be used to get your foot in the door and create the possibility of future conversations down the road.
Cold outreach email campaigns can be an effective way of reaching targeted leads. Sourcing prospects from relevant industries is the first step to creating a successful lead generation campaign.
Platforms like LinkedIn can be useful for making initial contact with a person and getting on their radar. Commenting on industry relevant posts can help establish dialogue and brand awareness.
Referral marketing is an extremely effective lead generation strategy because of the social, word-of-mouth aspect. A potential lead might not buy into marketing messaging that comes from you directly. They’re much more likely to listen to what someone they know and trust has to say about your company.
A satisfied customer referring a colleague to you has a higher chance of becoming a customer conversion than other channels.
You can incentivize referrals by rewarding customers who act as ambassadors for your company. Rewards can include things like a financial bonus, discounts on products, company swag, access to exclusive events, etc.
Both attending and hosting industry-related events is another effective way to generate new leads. At events, you can meet potential leads face-to-face and get to know them better. This is a great way to help better understand their challenges and pain points.
You might also meet someone who can introduce you to other prospects that are worth pursuing.
Hosting events, whether in-person or virtual, allows you to demonstrate your expertise, answer questions, and network. All of which have the potential to bring in new leads.
Grow your company with lead generation
Having a strong, optimized lead generation process is one of the most effective ways to grow your company. A steady flow of qualified leads gives you confidence that you will continue to generate new revenue month after month. And as you optimize your process and incrementally improve your conversion rate, that revenue will only increase.
It’s a powerful virtuous cycle. Optimizing your lead generation channels and approaches results in more qualified leads. Improving your conversion rates from those leads boosts revenue velocity. Both of these allow you to invest in more optimization, further improving your lead gen results.